Rise in Home Values Boosts Tax Receipts
Los Angeles County’s red-hot housing market drove property assessments to a record high this year, notching a $55.3-billion increase over 2003, the county assessor’s office reported Wednesday.
The factors fueling the increase -- a brisk seller’s market, low interest rates, a scarcity of land available for development and stiff competition among buyers for starter homes -- are familiar to anyone shopping for a house.
Property assessments reached $781 billion as of Jan. 1, a 7.6% rise over the assessment roll on Jan. 1, 2003.
Assessed values shot up even higher in cities such as Signal Hill, which saw a 13.7% increase. The removal of old oil wells, coupled with new luxury housing and retail development, made Signal Hill “one of the more desired locations” in the county, according to Assessor Rick Auerbach’s report. Palmdale saw a 13% gain in value, driven by new development and rising home prices.
“It’s a record market,” Auerbach said. “But of course it gets moderated by Prop. 13, because the only properties that are reassessed are the ones that change ownership or have new construction.”
Each year, the county assessor must put a value on all residential and commercial property in order to levy property taxes. If the property changes hands, the new assessment is generally based on the purchase price. If not, the assessed value rises with inflation, based on the consumer price index. This year, the index increased 1.87%.
Under Proposition 13, approved by California voters in 1978, counties cannot raise the assessed value of a parcel by more than 2% a year, even if prices soar, unless the parcel is sold.
This year, the county will collect about $7.5 billion in property taxes.
The revenue is used to pay for schools, police officers, libraries and government services.
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Rising values
Property assessments in Los Angeles County continue to rise, driven by the robust housing market.
Total assessed valuation (in billions of dollars)
2001: $636
2002: $676
2003: $726
2004: $781
Source: Los Angeles County Assessor
